Global stocks bounce back after Fed and BoE hikes as yields retreat

Global equity markets staged a broad rebound on Thursday, even as investors digested the first US Federal Reserve rate hike in three years. Reuters reported that major stock benchmarks rose while Treasury yields pulled back, signaling that investors see the Fed’s move as tough on inflation but not catastrophic for risk assets. Much of the central bank’s hawkish tone appears to have been priced in ahead of the decision, limiting additional damage to valuations.

In Europe, the Bank of England also opted for another rate increase, underlining a coordinated push by major central banks to clamp down on persistent inflation. The easing in long‑term yields after the announcements has helped equities recover, with some strategists arguing that markets are slowly adapting to a “higher for longer” rate environment. While volatility is likely to stay elevated, attention is shifting back toward fundamentals such as earnings resilience and the trajectory of oil prices, which have recently retreated from their peak and reduced some of the immediate inflation pressure on portfolios.